On the corporate accelerator tsunami

Firstly let me start by saying that this is not about corporate VCs. I will say though that – like anywhere – there are some very good corporate VCs that “get it” (Google, SAP, Intel, T-Venture, etc etc) and some very bad ones that don’t.

This is about the tsunami of corporate accelerators and incubators that is upon us. In general I am very happy for corporates to take a shot at helping folks build companies through their accelerators / incubators.

Good vs bad accelerator

There are some good folks out there that understand the old corporate agenda won’t work when working with very early stage companies. These folks also understand that a corporate accelerator is about getting exposure to some fresh ideas, chaos, new tech trends, pieces of technology, having their own employees take a shot, etc …. but, realistically, probably not much more.

And then there are corporate accelerators that “…don’t want to miss another Facebook…” or “…want to build the next twitter”. Those are the ones that are going to end in tears. Those are the ones you probably want to steer well clear of as an entrepreneur.

It is close to impossible for corporate accelerators to be a success, if you measure success by expecting a large category defining multi billion company to make its way out of your programme. The reasons are so painfully obvious I am not going to detail them here.

Easy come, easy go

However even the good ones need to prove they are here for the long-term, because they have an easy come, easy go problem.

Running an accelerator for some of these companies costs the same or maybe less as renovating the lobby of their headquarters. For a multi billion revenue company desperate for innovation it is a no-regret move to set up a corporate accelerator. The problem is shutting it down again is also a no regret move.

It is not the core business, it will not impact revenues or margins, it will not disgruntle large customers (or any at all), “the programme is not meeting our cost of capital”… you can just see the discussion a few years down the road.

Corporate accelerators are low commitment players in a high commitment game. That’s a problem.

So I’m welcoming everyone to the table, but I want to see how you deal with that problem. Long term.


5 Comments on “On the corporate accelerator tsunami”

  1. Basically fancy new name for R&D departments?

    • berlinvc says:

      I think if corporates were to view it that way then that’s great. And have most talented employees head there who’s ideas would be smothered in departments otherwise…

  2. […] Corporate Accelerators On the corporate accelerator tsunami Firstly let me start by saying that this is not about corporate VCs. I will say though that – like anywhere – there are some very good corporate VCs that “get it” (Google, SAP, Intel, T-Venture, etc etc) and some very bad ones that don’t. berlinvc […]

  3. Marc says:

    Some corporates will invest an incredible amount of money (Media, Publishers), i.e. have an intense financial commitment nowadays. Let aside the strategic commitment, because their core business is dead.

    Axel Springer raised a billion dollars, which they’re going to invest in digital, so there will be an AS incubator soon too, with the aim to steer the companies fate in the next years (…I guess)

    Creating a billion dollar company is – in my opinion – just not something that you can aim for at all. It involves so much luck and is not really something you can determine at the start. It is a numbers game, a little like playing poker: You increase your odds if you’re smart, but it’s still somwhat of a gamble.

    I think what corporate programs lack in this regard, is just that badass-ness that the young-rich BAs & VCs in the valley have.

  4. Pat Ransil says:

    Like many projects, accelerators need a clear mandate and realistic goals. Then the company needs to honor that agreement and let the new team prove what they can do. Sometimes it is very speculative early research where you really can’t predict what will come out. In other cases, an accelerator can have very specific goals and you build a “complete” team that has all skill sets needed so they have minimal dependency on the main corporation. Put the team in a separate building to keep them away from the distractions and politics of normal larger corporations. Then you can see amazing results.


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